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April 18, 2013

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HomeCity specialsHangzhou

Pharmaceutical giant opens new US$120m plant

US-HEADQUARTERED drugs company MSD first set up a plant in Hangzhou back in 1994. As it looks to expand its presence in China, the firm this week unveiled a state-of-the-art base in the city to turn out 300 million packs of drugs annually. Ding Yining reports.

MSD has unveiled a new US$120 million plant in Hangzhou, to secure pharmaceutical product supplies in the region as the drug company taps into growing demand and seeks to consolidate its position in China.

The new Hangzhou plant, located in the Hangzhou Economic and Technological Development Area, is the largest manufacturing base in the Asia Pacific region for MSD.

The new facility is 75,000 square meters and will feature 16 high-speed lines to package pharmaceutical tablets and sterile medicines that are used to manage conditions such as diabetes, cardiovascular eases, infectious, respiratory and bone diseases.

It is expected to achieve 10 billion yuan (US$1.62b) output in future.

"The new Hangzhou plant marks another milestone for MSD and we're seeking to bring more innovative medicines and vaccines to China and demonstrate China's importance to us," said Pam Cheng, president of MSD China.

It will have a capacity for handling 300 million packs annually after going into full operation.

By the end of this year, eight production lines will be operational, with two relocated from the old plant in Hangzhou. The total 16 production lines will be fully operational within two years.

It also has the capacity to handle future expansion plans as MSD is seeking to launch more products in China in the coming years.

The new plant will also be responsible for packing products to be used in MSD research and development clinical studies and other auxiliary activities supporting future new product launches.

"The launch of the new Hangzhou plant complements our existing research and development facility in Beijing and business operation in Shanghai so that the company would be fully prepared for future expansion with the three pillars," said Cheng.

The US drug company has 72 production sites globally and the new opening will play a key role in the firm's global manufacturing chain.

"It also extends our long-standing partnership with the Chinese government, and our unequivocal commitment, to help broaden access to quality health care throughout China," Willie Deese, president of MSD's Merck Manufacturing Division, said at the opening ceremony for the Hangzhou factory on Tuesday.

"The new facility in Hangzhou Economic and Technological Development Area joins an integrated, interdependent network of 72 MSD facilities that supply medicines and vaccines to more than 140 countries," he said in an interview in Hangzhou on Tuesday.

"The major reason for MSD to expand our production facility in Hangzhou is to serve the growing demand in local market and 85 to 90 percent of the output will be provided to local patients," Gerard Carmody, executive director of MSD's manufacturing operations in Hangzhou, told Shanghai Daily.

The new plant brings the drug maker's products closer to consumers and with greater flexibility.

Hangzhou is MSD's priority in the Chinese market, which itself has long been an important market for the company, according to Cheng.

MSD has been tapping into the booming demand in the fast-growing market and has kept its commitment to enhance health care and reach out a wider territory in the world's most populous area.

In 2011, MSD China teamed up with Simcere Pharmaceutical Group to establish a joint venture to distribute their key products to a wider territory in the country.

MSD's investment in China dates back more than 20 years ago when it transferred hepatitis B vaccine manufacturing technology to China in 1992, before building a manufacturing plant in Hangzhou in 1994.

MSD has introduced more than 40 innovative medicines and vaccines in China in the past two decades, says the company.

Hangzhou has been successful in attracting a number of multinational pharmaceutical companies to bring state-of-the-art production facilities, techniques and management experience to the city to boost the local pharmaceutical industry.

The bio-pharmaceutical sector is among the four pillar industries in Hangzhou Economic and Technological Development Area, alongside electronic information, machinery manufacturing and food and beverages.

"The area has attracted more than 60 bio-pharmaceutical companies and MSD's decision to locate its manufacturing site here has laid a solid foundation for the further development of bio-pharmaceutical industry here," said Wang Yongfang, deputy director of the management committee of the Hangzhou Economic and Technological Development Area.

By the end of 2015, the area is expected to host as many as 200 pharmaceutical companies with industrial output reaching 26 billion yuan.

In addition to attracting multinational giants, Hangzhou Economic and Technological Development Area has also provided a series of incentives and supporting measures to start-up companies.

Medical services and testing equipment service providers are sharing resources and seeking collaborations through an incubator set up by the management committee of Hangzhou Economic and Technological Development Area.

Other overseas companies are seeking ways of tapping into the Chinese market, which is expected to become the world's second largest pharmaceutical market by 2015.

Pfizer Inc launched a joint venture with Zhejiang Hisun Pharmaceuticals in the second half of last year.

Hisun-Pfizer Pharmaceuticals Co Ltd, with total investment of US$295 million, will focus on the development, manufacture and commercialization of OTC products in China and across the world.


 

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